You get in life what you have the courage to ask for

Over the past few weeks I have made the mistake of using my credit card *shrill*. I have been planning some upcoming trips and using my card to go ahead and purchase everything I’ll need in advance but with it has come that terrifying bill in the mail. I did plan ahead and already have worked out how I will quickly pay it off but it made me sit down to consider what I would do if I did have major debt looming overhead. Here are a few tips to help anyone pay off debt.

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1. Pay off your credit cards
There are plenty of sites out there that will talk about credit card churning for the points and for the benefit of improving your credit. I agree with them for the purpose they serve but there is also a danger to doing so. If you are not someone who immediately goes home and pays off your credit card you are likely to end up paying interest on those charges. Once you have a decent amount charged up on your card and it starts taking the interest hits your debt can go spiraling out of control. Take charge of your charges and get them paid off as quickly as possible. My suggestion if you have multiple is to pay off the card(s) with the highest interest rate while paying the minimum and then roll all of the extra money you were paying off the initial one to the next one until you have them all paid off. This is a Dave Ramsey method and has worked for tons of people.

2. Lower your monthly payments
Do you have car insurance? A phone bill? Cable? These are all bills that you could potentially have lowered in order to put towards debts that you cannot. If your contracts are running out soon, call around or skim the internet for better prices. If you are adamant about staying with your current provider call them and ask to speak with a manager and tell them you’re a loyal customer and would like to see if they have a better rate they can offer you. The savings from doing so for any of these contracts can be used to pay down your other debts.

3. Make more money
There are a multitude of ways to bring in additional income. You can go get a second job at a store or food establishment you like. Doing so would not only benefit you in bringing in additional income but also save you money on purchases you would have already made thanks to employee benefits. Any additional money you earn could be automatically deposited into your savings or you can make an agreement to yourself to pay at least a portion of your additional earnings towards getting rid of debt.

4. Make smart spending choices
Do you really need that latte? If you’re spending $5 a day on a fancy latte that means you’re dishing out an extra $1825 a year. $5 a day might not seem like much but little purchases truly add up. If you were to make the same beverage at home for around $1 or less you would save $1460 to put towards your debt per year!

5. Lower your interest rate
If you have been with a company long enough and in good standing you should have no issue with getting them to lower your interest rate. I say so because I have done so recently. All you have to do is call and ask. The worst they can say is no and you can call back in a few weeks or months and try again.

6. Borrow from your savings
If you only have a small amount built up in your savings I would suggest by-passing this option. However, if you are like me and have a surplus beyond what you would need in the case of an emergency then borrow some of that money and pay off your debts. You are going to earn far less interest in your savings than you will be paying on your debt so pay off your debt first and you will be able to quickly replenish any money you have borrowed from your savings.

Working out which things to cut back on is a big one for most people. I remember about 2 years ago working out that my boss could have saved $57,000 of interest off his mortgage if he gave up buying his 3 coffees a day for the next 25 years.

What I found really amusing was that work provided free coffee, but he still chose to pay for it from the coffee cart.

Wow that’s a huge little chunk of cash he’s missing out on there. I fortunately don’t have any vice’s such as coffee but my lust for travel definitely cuts into my savings. I feel that it has been more than worth it.

Credit cards are the devil. I just can’t… I got myself into so much trouble when I was in my early 20s. I try and pay cash for everything now, it’s the only way I can mete out any level of self control!

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